Plans Progressing for PCI's Medical Mall

By Cindy Hadish, Reporter

CEDAR RAPIDS - A portion of Second Avenue SE will close in April under plans for constructing Physicians' Clinic of Iowa's new medical mall.

Mike Sundall, the group's CEO, said PCI is working with the city on finalizing the development agreement for the mall, which includes tax increment financing.

Attorneys will review the financial details and architects are finalizing the building's design so contractors can bid on the project, Sundall said.

"If everything goes accordingly, we would start construction when the snow melts in April," he said.

Sundall likened the process to closing on a new house.

PCI is also working on its bank loan, he noted.

The City Council voted last week to close Second Avenue SE between 10th and 12th streets to allow PCI to build the 200,000-square-foot medical building, which has a footprint that extends beyond a typical city block.

Council members still must vote two more times on the street closure request, with the final vote slated for spring 2011.

Sundall said timing on the final vote is intentional. The city will be responsible for snow removal and other street work until PCI and St. Luke's Hospital, which is assembling the property for PCI, are ready to begin construction.

The building is expected to open in 2013.

Opponents have argued against closing Second Avenue, an important artery into downtown Cedar Rapids, but Sundall said he is hearing from people who support the project.

"This is the first private development in downtown since the flood," he said, citing the federal courthouse and upcoming library among the public building projects in the works since the 2008 flood.

Tax increment financing will be used to fund an $8 million parking ramp for the medical mall.

The city will use the difference in PCI's $300,000 current property taxes and the increase to $1.3 million in annual taxes on the new property to finance the structure.

That ramp will be connected to the medical mall via skywalk, Sundall said.

Many people have suggested using skywalks to connect portions of PCI's new building, so Second Avenue would not have to close, but Sundall said that negates the point of the medical mall.

"We don't want to be in three buildings," he said. "We want to be in one."

A skywalk adds $700,000 to $1 million to the project.

Building higher, rather than wider, is also out of the question, Sundall said.

He said PCI has already made concessions by staying in downtown Cedar Rapids, rather than going to green space in Hiawatha.

The mall is going to be 2 ½ stories rather than one level; the site is on 5 acres instead of 12 to 15; a garage will be used in lieu of surface parking and space for future expansion is almost nonexistent, Sundall said.